CIC pulls out of Bumi’s $362 mln share sale -source

According to Reuters, “Sovereign wealth fund China Investment Corp (CIC) has pulled out of a debt-for-equity swap with Bumi Resources because of disagreement over terms, said a source with direct knowledge of the deal on Friday.

The decision by CIC is a setback for Bumi which had hoped to swap some of the $1.9 billion in debt that it borrowed from CIC last year into equity in order to reduce its gearing.

Bumi had originally planned for CIC to buy its entire $495 million share placement, sources told Reuters in June, but the coal miner has since scaled back the size of the deal to raise $362 million, priced at 2,366 rupiah per share. For most of the period since June, when talks between the two parties started, however, Bumi’s share price has traded below 2,000 rupiah.

“CIC decided to pull out from the deal because of the difference in the share price,” said the source.

“They are a sovereign wealth fund and it’s hard for them to accept Bumi’s premium.”

Read more: Reuters

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